Fossil fuel support is rising again in a threat to climate change efforts

fossil fuel.jpeg

(Peter Forster, Unsplash)

This article is brought to you in association with OECD.


Fossil-fuel subsidies are environmentally harmful, costly, and distortive. After a 3 years downward trend between 2013 and 2016, government support for fossil fuel production and use has risen again, in a threat to efforts to curb greenhouse gas emissions and air pollution, and the transition to cleaner and cheaper energy. Support across 76 countries increased by 5% to USD 340 billion in 2017, according to a new OECD-IEA report prepared for the G20.

OECD-IEA Update on Recent Progress in Reform of Inefficient Fossil Fuel Subsidies that Encourage Wasteful Consumption also shows that even in the group of 44 OECD and G20 countries, where fossil fuel support is still declining, the reduction has slowed down. Support in these countries was down 9% in 2017, a slower decline than the 12% recorded in 2016 and 19% in 2015.

The reversal comes as some countries reinstated stronger price controls on fossil fuels, in response to volatility in international oil prices, which made it harder to continue energy pricing and taxation reforms.

Some progress has nonetheless been made: the report finds that many countries, including Argentina, India, Indonesia and several Middle Eastern and Northern African economies, have continued to take steps to reduce support for energy consumption. Western Europe has completed its phasing out of hard-coal subsidies and efforts continue to end state aid to coal-fired power generation in the European Union.

Oil and gas industries in several countries, however, continue to benefit from government incentives, mostly through tax provisions that provide preferential treatment for cost recovery. Such policies go against domestic efforts to reduce emissions.

The report was presented to G20 energy officials ahead of the G20 Ministerial Meeting on Energy Transitions and Global Environment in Karuizawa, Japan, where countries reiterated their commitment to phasing out inefficient fossil fuel subsidies and encouraged countries that have not done so to volunteer for a Peer Review.

“This new OECD-IEA report signals a worrying slowdown in our efforts to phase out fossil fuel subsidies,” said OECD Secretary-General Angel Gurría. “The critical nature of the climate change crisis has never been clearer than it is today. Countries should be accelerating their reforms, not taking their feet off the pedal. We cannot promote inclusive and sustainable growth if we continue subsidising fossil fuels!”

The report combines the IEA’s price-gap approach to capture the transfer to consumers of policies that keep fossil fuels below reference prices and the OECD’s 2019 Inventory of Support Measures for Fossil Fuels, which takes stock of spending programmes and tax breaks used in the 36 OECD countries and eight emerging countries (Argentina, Brazil, China, Colombia, India, Indonesia, Russia and South Africa) to encourage fossil fuel production or use. These include measures that reduce prices for consumers or that lower exploration and exploitation costs for oil and gas companies.

Increasing transparency on the use of scarce public resources can help to keep up momentum for fossil fuel subsidy reform. Building on the evidence brought to the table by the OECD, G20 countries committed in Pittsburgh in 2009 to “rationalise and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” Since then G20 countries – China, Germany, Indonesia, Italy, Mexico and the United States – have completed voluntary G20 Peer Reviews of inefficient fossil fuel subsidies, and Argentina and Canada are just starting theirs. The OECD has been asked to play Secretariat role for all the country reviews, to chair and facilitate these processes, which have to date evaluated more than 100 government interventions relating to the production and use of fossil fuels.
“OECD evidence leaves no doubt” says Gabriela Ramos, OECD Chief of Staff and G20 Sherpa – “inefficient fossil fuel subsidies undermine global efforts to tackle climate change, aggravate local pollution, and are a strain on public budgets, draining scarce fiscal resources that could be invested in education, skills, and physical infrastructure. We urge all G20 countries to keep up the effort, and join the voluntary G20 Peer Reviews of inefficient fossil fuel subsidies.”

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

70 years on, landmark UN human rights document as important as ever

Eurobarometer: Not a single answer about what the Banking Union will cost to citizens

AI-powered automation will have an ethnic bias

Canada has created an Arctic conservation zone almost as big as Germany

Future EU-UK Partnership: European Commission publishes draft legal text

Ukraine pays the price for lying between Russia and the EU

Bankruptcy or referendum: which one is going to be first?

EU Justice Scoreboard 2019: results show the continuing need to protect judicial independence

European Fund for Transition to support more workers made redundant

Africa is launching the world’s largest free trade area – but these are the stumbling blocks

Nearly a third of the globe is now on Facebook – chart of the day

Our global system has spun out of control. Here’s how to rebalance it

UN General Assembly celebrates 20 years of promoting a culture of peace

G20 World Exclusive Interview: “The world, especially emerging economies and developing countries, require a more sustainable and quality development”, the Spokesperson of Japan underscores live from Antalya Turkey

Regional competitiveness and growth: a Gordian knot for Europe

An economist explains why women are paid less

UN Member States overwhelmingly support end of US embargo against Cuba

LGBTQI+ and health care: do they deserve more attention from medical universities?

What little Cameron got in Brussels seems enough to keep Britain in the EU

G20 LIVE: “United States and Turkey stand in solidarity with France and its people in handing the perpetrators of this crime and bringing them to justice”, US President Barack Obama underlines from G20 in Antalya Turkey

Coronavirus: 5 ways to work from home with your kids (and stay sane)

Global climate change: consequences for human health in Brazilian cities

Courage of terrorism survivors underlines ‘urgency’ of UN Investigative Team’s work in Iraq

End fossil fuel subsidies, and stop using taxpayers’ money to destroy the world: Guterres

#Travelgoals: why Instagram is key to understanding millennial tourism

The rise of techno-nationalism – and the paradox at its core

EU-Turkey leaders’ meeting, 9 March 2020

Burundi: Inclusive dialogue ‘only viable option’ for resolving country’s political crisis says, UN envoy

45th Anniversary of the French Confederation (Confédération Nationale des Junior Entreprises)

Syrian civilians must be protected amid ISIL executions and airstrikes: Bachelet

Privacy is a human right, we need a GDPR for the world: Microsoft CEO

Multilateralism: The only path to address the world’s troubles, signals Guterres

Syria: UN health agency highlights ‘critical health threats’ facing Idlib civilians

China’s lead in the global solar race – at a glance

Sustainability, peace, security ‘best guarantee against instability’ Guterres to Security Council

OECD Donor countries need to reform development finance to meet 2030 pledge

Four in five adolescents failing to exercise for even 60 minutes a day, UN health agency warns

World Population Day: ‘A matter of human rights’ says UN

UNcomplicating the UN: a new podcast is born over coffee in New York

Commission Vice-President Rehn exaggerates Eurozone’s growth prospects

An expert explains: the digital risks facing our children during COVID-19

How will EU look after French, Dutch and German Elections and what will be the implications for Youth Entrepreneurship?

EU plans pan-European network of cybersecurity services

Thousands of Syrians in ‘life and death’ struggle amid harsh conditions in remote desert camp, UN warns

Tuesday’s Daily Brief: #GlobalGoals progress, essential meds, updates from Cox’s Bazar, Sudan and DR Congo

Lagarde: Keep feeding the banks cut down wages and food subsidies

Crime and drugs in West and Central Africa: Security Council highlights ‘new alarming trends’

Country origin ‘best predictor of outcome’ for children with cancer, UN experts say

‘Reaffirm the sanctity’ of religious sites, says Guterres, launching new plan to ‘counter hate and violence’

4 key steps towards a circular economy

Cameron postpones speech in Holland

How to help companies become global defenders of LGBTI rights

How COVID-19 could open the door for driverless deliveries

Migration crisis update: What are the chances of a fair deal at this EU Summit?

Boosting adult learning essential to help people adapt to future of work

Here’s how to make ‘value-based healthcare’ a reality

Action needed to end deadly clashes between African herders and farmers: UN chief

The IMF overstates the risks for Eurozone and downgrades the threats for the US economy

UN working with both sides, after hidden tunnels confirmed along Lebanon-Israel ‘Blue Line’

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s